PGNiG: Commencement of negotiations with EDF International SAS

Further to Current Reports No. 89/2016 of September 16th 2016 and 112/2016 of November 30th 2016 concerning the submission (together with partners) of an offer for the purchase of EDF Investment SAS’s (‘EDF’) assets in Poland, the Management Board of Polskie Górnictwo Naftowe i Gazownictwo S.A. (‘PGNiG’) announces that on January 27th 2017 PGNiG Termika S.A., a subsidiary company of PGNiG, together with PGE Polska Grupa Energetyczna S.A., ENEA S.A., and Energa S.A. (the ‘Business Partners’) signed a Memorandum of Understanding with EDF to conduct negotiations on a purchase of EDF’s assets in Poland (the ‘Transaction’) and a due diligence in this respect.
The Transaction includes:
(i) acquisition of all shares of EDF in EDF Polska S.A., which is in particular the owner of: 4 Combined Heat and Power Plants i.e. Kraków, Gdańsk, Gdynia and Toruń, district heating network in Toruń, Rybnik Power Plant, and
(ii) acquisition of all shares of EDF in Zespół Elektrociepłowni Wrocławskich Kogeneracja S.A., which is the owner of 4 Combined Heat and Power Plants i.e. Wrocław, Zielona Góra, Czechnica and Zawidawie and district heating network in Zielona Góra, Siechnica and Zawidawie.
The Business Partners have agreed that a potential binding offer may be made after completion of the due diligence, the results of which will be the basis for taking further decisions concerning the Transaction.
The Company will announce execution of the Transaction or otherwise closing of the negotiation process concerning the Transaction in a separate report.